To Fend Off Populist Threat, EU Wants Tougher Global Trade Rules

In a fresh effort to fend off the inequalities of globalisation that have been seized on by hard-right nationalists such as Marine Le Pen of France, Europe will press the US and China for tougher world trade rules.

The European Commission called for stronger global rules and institutions to promote trade fairness while urging EU member states to bolster innovation and education in a paper on Wednesday that rejects the kind of isolationist turn advocated by US president Donald Trump.

Anxiety that job losses and factory closures linked to globalisation will continue to fuel support for European populists, has tempered the relief in Brussels at the defeat of Ms Le Pen in the recent presidential election.

There is concern that the EU remains vulnerable to anti-establishment movements that whip up public support by attacking free trade and open markets even though Ms Le Pen’s loss follows the failure of her ally Geert Wilders to gain traction in the Dutch election two months ago.

Ms Le Pen’s tally of almost 11m votes was more than double the number gained by her father Jean-Marie Le Pen in the 2002 election despite losing by a big margin to Emmanuel Macron. “This movement is still there. If we can’t deliver it will come back to bite us,” said a senior Brussels official.

Amid tension in world trade over Mr Trump’s demands for a shake-up of global commerce, the commission’s push to assert more political control over globalisation could draw some criticisms from certain quarters.

Even as he pulls back from more radical steps such as declaring China to be a currency manipulator, but imposes tariffs on some Canadian imports, Mr Trump continues to advance an aggressive “America first” trade policy.

By raising questions as to whether Europe could marshal US support for a new drive to strengthen trade rules, the commission specifically rejects protectionism, a stance supported by most EU member states. For measures that might weaken its economic power, any such effort would require the support of China.

The global rule book should be expanded and remains far from complete, Brussels will still argue. Whenever products such as cut-price steel from China are dumped on European markets, the commission will also assert the right to impose punitive tariffs while calling for a global investment court to settle disputes.

The commission will say the benefits are spread unequally and fan social polarization although it will make the case that globalisation is a positive force that boosts economic growth. Research that suggests a majority of Europeans view globalisation as a threat to their country’s identity will also cited by it.

Unless further steps are taken to curb its downsides, globalisation will contribute to a further widening in inequalities, the commission will also say.

A part of a wider drive to revitalise the EU after the Brexit shock is the effort to recast globalization. Efforts to reinforce the foundations of the single currency, boosting workplace protection and parallel plans for a social policy agenda, will be included in it.